Correlation Between Cofinimmo and Montea CVA
Can any of the company-specific risk be diversified away by investing in both Cofinimmo and Montea CVA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cofinimmo and Montea CVA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cofinimmo SA and Montea CVA, you can compare the effects of market volatilities on Cofinimmo and Montea CVA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cofinimmo with a short position of Montea CVA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cofinimmo and Montea CVA.
Diversification Opportunities for Cofinimmo and Montea CVA
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cofinimmo and Montea is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cofinimmo SA and Montea CVA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montea CVA and Cofinimmo is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cofinimmo SA are associated (or correlated) with Montea CVA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montea CVA has no effect on the direction of Cofinimmo i.e., Cofinimmo and Montea CVA go up and down completely randomly.
Pair Corralation between Cofinimmo and Montea CVA
Assuming the 90 days trading horizon Cofinimmo SA is expected to under-perform the Montea CVA. In addition to that, Cofinimmo is 1.02 times more volatile than Montea CVA. It trades about -0.02 of its total potential returns per unit of risk. Montea CVA is currently generating about 0.02 per unit of volatility. If you would invest 6,151 in Montea CVA on August 24, 2024 and sell it today you would earn a total of 429.00 from holding Montea CVA or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cofinimmo SA vs. Montea CVA
Performance |
| Timeline |
| Cofinimmo SA |
| Montea CVA |
Cofinimmo and Montea CVA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cofinimmo and Montea CVA
The main advantage of trading using opposite Cofinimmo and Montea CVA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cofinimmo position performs unexpectedly, Montea CVA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Montea CVA will offset losses from the drop in Montea CVA's long position.| Cofinimmo vs. Aedifica | Cofinimmo vs. Warehouses de Pauw | Cofinimmo vs. Groep Brussel Lambert | Cofinimmo vs. Ackermans Van Haaren |
| Montea CVA vs. Melexis NV | Montea CVA vs. Biotalys NV | Montea CVA vs. Nextensa NV | Montea CVA vs. Belysse Group NV |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Transaction History module to view history of all your transactions and understand their impact on performance.
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